TA Associates has invested $45 million for a minority stake in Micromax Informatics Ltd., the third-largest mobile handset provider in India.
TA Associates, a leading growth private equity firm, today announced a minority investment of $45 million in Micromax Informatics Limited, one of India’s leading mobile handset providers.
Founded in 2000 as a telecom equipment distributor, Micromax entered the mobile handset market in April 2008. The company has experienced significant sales growth, outpacing several longstanding global competitors. Micromax is now the third largest handset provider in India, as measured by volume. The handsets are sold through more than 45,000 retail points in 120 cities across the country. Micromax is headquartered in New Delhi.
“As a fast-growing, profitable company in a growth industry, Micromax ideally fits TA’s investment profile,” said Naveen Wadhera, Director, TA Associates Advisory Pvt. Ltd., who will join the Micromax Board of Directors. “The company’s emergence as a leading mobile handset brand in only 18 months is remarkable. This is one of the largest technology investments in India in the past year, and will provide additional support to help continue the company’s growth trajectory.”
“We are pleased to enter this partnership with TA,” said Rajesh Agarwal, Managing Director, Micromax Informatics Limited. “TA offers a unique combination of financial support, strategic guidance and a significant network of contacts, as well as a wealth of experience in the communications sector. We welcome the firm as our first institutional investor, and anticipate a successful and mutually beneficial relationship.”
According to Macquarie Research and Grant Thornton, the Indian wireless market is one of the fastest growing in the world, adding 10 to 15 million mobile subscribers per month. The number of subscribers has grown from approximately 100 million in 2006, to more than 400 million today and is expected to grow to over 800 million over the next three years.
“The Indian mobile handset market is going through a fundamental share shift towards local branded players,” said Ajit Nedungadi, a Managing Director at TA Associates who will also join the Micromax Board of Directors. “As the leading local brand, Micromax has rapidly introduced phones that address specific local market needs and thereby created a unique position in the market. We are very pleased to complete this investment, TA’s first in India since opening our advisory office, TA Associates Advisory Pvt. Ltd., in India last year.”
TA Associates has more than four decades of investing experience, focusing on profitable growth companies. TA’s prior investments in the communications sector include FreeWave Technologies, Idea Cellular, MetroPCS Communications, SBA Communications, TARGUSInfo, TEOCO and Weather Investments S.p.A.
A portion of the investment is subject to certain conditions.
Goodwin Procter LLP and Lexygen provided legal counsel to TA Associates. Grant Thornton served as the sole financial advisor to Micromax and INDUS G&D Law provided legal counsel to Micromax.
About Micromax Informatics Limited
Micromax prides itself on being a leader in wireless telecommunications in India. With a futuristic vision and exhaustive R&D, the company has successfully generated innovative technologies that revolutionized the telecom sector. Micromax is a pioneer in creating life-enhancing mobile phone solutions and wireless technologies that cater to the increasingly sophisticated needs of mobile users. Driven by aspirations and passion for the telecom world, the company is geared up to bring paradigm and groundbreaking mobile solutions incorporating the latest in cutting-edge technology. More information about Micromax is available at www.micromaxinfo.com.
About TA Associates
Founded in 1968, TA Associates is one of the largest and most experienced middle market private equity firms. The firm has invested in nearly 400 companies and manages more than $16 billion in capital. With offices in Boston, London, Menlo Park and Mumbai, TA Associates leads buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, business services, healthcare and consumer industries. More information about TA Associates can be found at www.ta.com.